organized, rigorously on schedule, designed to carry, spread and disseminate whatever he wished to say. he wished to say nothing. and that could end up being the epithet for romney in 2012. he didn't want to say anything. that's "hardball" for now. thanks for being with us. "the ed show" with ed schultz starts right now. good evening, americans. welcome to "the ed show." i'm ezra klein in for ed schultz tonight. it is 54 days until the 2012 election. and protests in at least six american embassies have the nation on edge. as the situation in the middle east continues to simmer, mitt romney has -- on his claim that president obama is appeasing the attackers. tonight we'll dig into romney's foreign policy and into his leadership. as ed would say, let's get to work. protests continued in the middle east today as fury over an anti-islam film fomented anger in the muslim world. we're looking at live pictures

of tahrir square where it turned violent. earlier today in yemen, protesters stemmed the u.s. embassy in the capital city of sanaa. security forces used tear gas to disperse demonstrators after fires were set and rocks were thrown at the compound. we are going to keep monitoring this situation for you throughout the show tonight. if anything happens, we'll go to it live immediately. but as the situation becomes increasingly volatile and traumatic overseas, the stakes have been quite raised for the presidential candidates here at home. this is actually -- this has highlighted a central thing the campaigns are there to do for us, for the american people. we are considering people who haven't been president before, who have never woken up or been woken up in the middle of the night by a call that says, sir, we have a dozen diplomats trapped under gunfire in a libyan consulate. that's part of what a campaign is, trying to figure out how the men and women will respond to that call. you probably remember this ad during the '08 democratic primaries. it put this choice in fairly

stark terms. >> it's 3:00 a.m. and your children are safe and asleep. but there's a phone in the white house and it's ringing. something's happening in the world. your vote will decide who answers that call, whether it's someone who already knows the world's leaders, knows the military, someone tested and ready to lead in a dangerous world. it's 3:00 a.m. and your children are safe and asleep. who do you want answering the phone? >> now, that ad, funny story, it was created by current secretary of state to undermine the candidate who went on to become president. it didn't work out all that well. it was a good ad, maybe the best of its cycle. it made a real point about being president. the way the obama campaign answered that ad in 2008, at least in part, was by running a discipline methodical organized and call campaign. the medium was a message, so to speak. this is part of what campaigns are there to do. they're these long grueling pressure cooker tests of the

candidates. the candidates have to deal with all sorts of issues. crises, challenges, bad news, unexpected questions, new policy ideas and do all of it on very little sleep and in front of cameras. it is not a terribly pleasant process for them, but it's one that reveals important things to us about who they are and who they are in particular under horrible pressure. in fact, one of the decisive moments in the 2008 campaign came about four years ago this very week. no one had had any questions when the election began about whether john mccain was prepared for the presidency. i mean, he's john mccain. but as the polls began to turn against him, mccain began making increasingly erratic decisions. for instance, he picked sarah palin to be his vice president. you might remember that. and then right around this time in 2008, laym man brlehman brot. he rushed back to washington to participate in meetings about t.a.r.p. but it leaked out he

didn't have much to say or add in any of them. the whole thing came off looking like a stunt and deeply unpresidential one at that and it was devastating for his campaign. of the two candidates, it was obama, the relative political newcomer who seemed to master these issues quickly and seemed calm under fire who ended up looking more presidential. the question now is whether mitt romney's comments about the attacks in libya and the mobs in egypt were just kind of a campaign gaffe, an intemperate comment, or whether they were a lehman like moment for him, a moment under serious pressure he displayed a lack of judgment that voters should really care about. james in "the atlantic" wrote of mitt romney's, quote, 3:00 a.m. phone call moment. he said, "often the most important immediate decision is not to react immediately." and that's a test, it was argued, that romney failed in this particular case. president obama followed with a similar line when speaking to "60 minutes" yesterday. >> there's a broader lesson to

be learned here, you know, governor romney seems to have a tendency to shoot first, name later. and as president, one of the things i've learned is you can't do that. it's important for you to make sure that the statements that you make are backed up by the facts and that you've thought through the ramifications before you make them. >> that line of thinking is the conventional wisdom now, that the problem for mitt romney was he acted too hastily. the actual timeline, however, is at odds with this theory. the initial statement from the u.s. embassy at cairo came at 6:17 a.m. eastern time on tuesday september 11th even before the protesters breached the embassy wall. "it was after 10:00 p.m. tuesday night, almost 16 hours late western the romney campaign released their statement. that's a fair amount of time to think it through. romney's response, whatever it was, was not a spur of the moment response. it was deliberated over the better part of an entire day. and romney's policy director

lanny chen told "the new york times," quote, while there may be differences of opinion regarding issues of timing, i think everyone stands behind the critique of the administration which we believe conducted its foreign policy in a feckless manner. so the romney campaign evaluated the situation and they decided cooly this was a way they wanted to respond. this was the appropriate path, the right path to pick. they doubled down on it and tripled down on it. this is part of a broader pattern here where in recent months the romney campaign has become unpredictable as polls turned on them. instead of sticking to their strategy of making it a ref r referendum on obama, it's two very different and competing economic visions. during a trip abroad romney made a decision to criticize his host country of england for their preparations surrounding the london olympics during a convention to introduce the candidate to the nation, romney chose to have an unvetted clint

eastwood engage in art on the night of his speech. with the polls turning against him they begun switching hastily from issue to issue moving from the economy to welfare to medicare. in recent days, of course, trying to turn the campaign to foreign policy. mitt romney under the pressure of the campaign has begun to crumble a little bit and this is frankly a surprise. mitt romney's business career, and his time in massachusetts, have pointed to a man obsessed with data. an ultra cautious adherent of the cost/benefit analysis way of life. david brooks wrote, romney was, quote, extremely detail oriented in his business life. he once canceled a corporate retreat in which abba had been hired to play saying he found the band's music too angry. abba? the biographical video painted a picture of the ceo driven to make the right calls at the right cost with the right information. >> why would anybody want to save on envelopes and file folders?

mitt is a cheap son of a gun and if he can save 50 cents on paper clips he'd drive a mile to do it. >> the question we're left with, which of these is the real mitt romney? the guy with tons of high-pressure business experience he handled very well? the governor of massachusetts who passed a bipartisan health reform bill he's now disowned as a national model? or the guy running this campaign who seems at this point to be anything but methodical and data driven? to help us answer that question we're going to turn to my friend and colleague at the "washington post" the e.j. dionne. you covered more presidential campaigns than me, fair to say. do you agree with the basic idea that campaigns are the place where we see the underlying qualities of the candidates or more as a political show that tests unrelated attributes to the presidency? >> no, i think almost by accident they do exactly what you said they do, because you get to see people react in

situations that they didn't predict, couldn't predict, and i've heard your example of mccain back in 2008 after lehman collapses is a good one. i thought what was decisive there is not that mccain -- just that mccain said, let's stop the campaign, let's stop the debate, but that about a half hour later, barack obama said, no, we're going to have the debate. and we had the debate and i think it was kind of a test of strength and obama won it and i think a lot of voters saw that. and i think in this case, it's going to be very interesting if voters -- romney clearly is data driven, as you suggest. they must have some data somewhere that says this whole apology argument, that obama apologizes, and let's just say for the record that none of these apologies actually happened. there's an untruth underlying this whole argument, but nonetheless, they must have polling that says people will respond to this. but to do it in the middle of a crisis like this, to do it at a

moment when we have just lost three people who are serving our country, i've got to think a lot of voters who may not particularly like barack obama say, gosh, that looks awfully political to me and not in the best sense of the word political. i think it does have an effect on how they see romney. >> and do you think, even aside from how it makes people see romney, whether or not that's breaking through, do you think it has an effect on how people should judge romney? i mean, your point here which is an interesting one, is maybe they do have data. maybe this is a plan, it's just a bad one. so that would seem to be sort of for the argument that, look, this is all just the campaign, you're not seeing anything different about romney here, they didn't read the polling data right or the statement got out of control a little bit. not that what you're seeing is a tendency to see these crises and then move too quickly or not fully wait for the ramifications before trying to enter them. jumping to a political advantage before seeing what the actual substance of it is. >> you know, more than a year

ago, somebody said, watch mitt romney, because he spent his life as a deal maker, and what a deal maker does is he does whatever it takes to close the deal. and what romney's campaign has looked like is somebody who will say a certain number of things to close a deal with the voters in massachusetts, when he ran for governor, and say other things to close the deal in a republican primary, and now he's got to say yet another set of things to close the deal with the independent voters he needs. but i think what you're seeing here is a romney campaign that sees the race getting away from them since the convention. and they've done a number of things that suggest that. they put romney on "meet the press," something they avoided. they put ryan out the same day. you don't take risks like that if you think things are going swimmingly. a pollster put out a memo, saying don't panic. that usually means they're panicking when they put out memos like that. clearly he's in a mode that says, i have to shake this up, and the democrats skorn s scoren

policy points on him at the convention. he took a lot of risks doing that. this was a dangerous circumstance in which to do that. i think that's what they decided to do. >> e.j. dionne, thank you very being here tonight. >> great to be with you. a quick note. a few moments ago we identified live pictures of cairo being tahrir square. the live pictures we're monitoring are shots of the protest in the area outside the u.s. embassy in cairo. we apologize for that. coming up next, mitt romney's comments that started all this, they're not the most important comments governor romney made in the last 48 hours. we're going to tell you what those are. ng out of a vital resource we need to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone's ready with the know how we need for a new tomorrow. [ male announcer ] make sure america's ready.

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coming up, mitt romney rips a page from the bush playbook on foreign policy. and we're going to update you on the growing anti-american protests in the middle east. and later, jared bernstein and dave weigel on today's major news from the fed. if you care about jobs and job creation, today was an absolutely huge day and we're going to explain it all.

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welcome back. you're looking at live pictures from cairo, egypt, right now, just outside the u.s. embassy. protesters are still massing at this hour. if anything happens, we will bring it to you immediately. but to go back to the underlying policy of the pictures you just saw, you know the comments here that are getting all the attention are mitt romney's original comments attacking the obama administration for a press release, released by the egyptian embassy before the attacks in libya had even begun. but when i went back through all the things that were said here

last night to prepare for today, that wasn't the comment i found most extraordinary and it's not even the comment that i think should be most meaningful to this election. yesterday, at his press conference the one where he doubled down on these remarks, governor romney, he said something else, something that deserves a lot more attention than it's gotten. he want to take this moment, he said, to draw a contrast between his foreign policy and president obama's. then he gave one of the clearest statements we've heard from him on exactly what his foreign policy would be. >> my foreign policy has three fundamental branches. first, confidence in our cause. a recognition that the principles america was based upon are not something we shrink from or apologize for. that we stand for those principles. the second is clarity in our purpose which is that when we have a foreign policy objective, we describe it honestly and clearly to the american people, to congress, and to the people of the world. and number three is resolve in our might.

that in those rare circumstances, those rare circumstances where we decide it's essential for us to apply military might, that we do so with overwhelming force, that we do so in the clarity of a mission, understanding the nature of the u.s. interest involved, understanding when the mission would be complete, what would be left when it is -- what will be left behind us when that mission has been terminated. >> governor romney basically said there that his foreign policy is america is awesome. and it needs to be confident in how awesome it is, clear in communicating its general awesomeness and when we go to war, quote, overwhelming in the use of force to promote or defend that awesomeness. it is a vision of how to conduct foreign policy that bases itself entirely on beliefs about america and our intrinsic goodness and it's a vision that to some degree we just tried. remember when we went into iraq and we were told that the people of iraq would know we were doing

it for the right reasons and we would be greeted as liberators and there would be flowers and candy and we would use overwhelming force at the beginning? it was called shock and awe back then. but then we'd be out of there pretty quickly. it didn't work out that well. and one of the guys who's most responsible for it not working out that well was don rumsfeld who, hey, what a coincidence, just came to romney's defense on these comments today saying on a radio show, it was, quote, the responsible thing to do to make this argument. and this gets back to the real underlying point romney was making in his statement. romney said he made that statement to show there was a real foreign policy divide between him and the obama administration. but what that statement really was about was a divide between romney and the people on the ground. the press release romney's attacking came from folks trapped in the egyptian embassy fearing an angry mob and who were trying to understand why that mob was angry and also how to calm it down. saying here in america that america is great doesn't do all

that much for you when you're in egypt and the angry guys with guns outside your window don't instantly agree. the last few years i think have been a repudiation of the idea that we can deal with the world entirely on our own terms, but that is clearly not the lesson governor romney has taken from them. for more on the lessons governor romney has taken from them, we turn to heather hoburt. now executive director of the national security network. james mann, author and residence at the johns hopkin university school advanced international studies and author of the book "the obamians." it's great to have you both here. james, i want to start with you actually. because you've been looking into romney's candidate -- i'm sorry, his sort of foreign policy advisers. how much overlap, how much similarities is there from the bush team? >> you know, there's a common saying that i hear around town that i actually don't agree

with, that the romney foreign policy team, when you look at his formal list of advisers, is all neocons, and i find that it's a blend. the problem that i see, and we've seen it in the last 48 hours, is far more at the top. i would be much more worried about romney and his own instincts. the formal campaign advisers, first of all, are all over the lot. and second of all, before, even before the last 48 hours, on issues like afghanistan, on, like, china, declaring china a currency manipulator. the foreign policy advisers say, we don't know where that came from. it didn't come from us. it's romney and the political people around him, above all. >> heather, in terms of the way romney laid out his vision for foreign policy, was confidence in american values, clarity in communicating them, and overwhelming force when we need to prosecute them militarily. you've, however, gone through his foreign policy in much greater detail. the white papers and all the

rest of it . is that really what it's based on? does that hold true in the nitty-gritty specifics? >> when i heard that yesterday, my first thought was, i like kitties and puppies also. there are not that many nitty-gritty specifics to get into. i get calls from supporters, can you explain this, explain that? i go through the details. for example, romney wants to add 100,000 troops to the military. he can't explain what he'd do with them. one of his advisers said in tampa, well, maybe we'd need them for all the new aircraft carriers we're going to build. well, you know, how many troops -- how many aircraft carriers would it take for 100,000 troops? 16. which is more than we have. so there is no -- there is no there, there. that kind of vague platitude is what we have of romney's foreign policy. we don't know what he'd do in afghanistan. his advisers don't agree. some of them want to pull out now. some of them want to stay. he's been on both sides of the original intervention in libya. his advisers are all over the

map on what we should do in syria. we wants to sanction china his first day in office except when he wrote his book he said he was completely opposed to trade sanctions with china. so i can't tell you what he would do. >> one of the things he's been specific on, though, james, is this apology tour argument. that obama's gone around apologizing. that's not true. what is that attack about? what is the genesis of it in republican foreign policy circles? >> it clearly forms, was formed by romney years ago, because he called his book -- >> "no apology." >> "no apology." it's an old traupe that they charge republicans for being weak on national security. it doesn't seem to work or fit that well this time. let me say this about apologies. it's important. first of all, no one can find in the record any formal apology by obama for anything. second of all, if we're talking about a loose expression of

contrition or regret, you know, george w. bush apologized to the chinese for the plane incident. if we have a loose apology. he apologized to abu ghraib to the king of jordan, he apologized for slavery in africa. why we think an american president should never express some kind of regret, we need other countries' cooperation on things like sanctions. >> heather, real quickly. would there have been a different way the romney administration could have dealt with the last 48 hours? it mostly seems to be fast-moving e events on other contin continents. >> no, your only choice really is what you say and do you show an image of resolve and do you show the people who are protesting, not the people who are killing americans which is totally indefensible and there's no excuse for, but do you also try to send a signal that says, hey, we have this wonderful constitution which guarantees

freedom of speech but which doesn't tolerate abuse of other people's religions? that's not what we are in america. i'm not sure a romney administration would have been adroit enough to do both of those things judging by the governor's performance. >> heather hurlburt of the national security accident cent mann of hopkins. thank you for being here tonight. >> thanks for having us. coming up, new details on the attacks that killed four at the embassy in libya. these are intensifying even as we speak. the president's response when we come back. [ male announcer ] imagine facing the day

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we have breaking news out of the state department right now. nbc news has confirmed that u.s. investigators have now identified the third and fourth american victims in that attack. both served as navy s.e.a.l.s. 41-year-old tyrone woods, worked for a private security form, so did 42-year-old glen doherty from massachusetts. defense officials are not telling us much about how they died. doherty's sister said he'd only be in libya for one week. >> glen lived his life to his fullest. he was my brother. if you ask his friends, he was their brother as well. >> meanwhile, there's a growing threat at embassies across the middle east. the angrier clash outside cairo outside the u.s. embassy overnight. 224 people have been injured there so far. there are fears the protests

could intensify tomorrow after friday prayers. as we've been reporting, those demonstrations and others in at least six middle eastern countries are reaction to a crude anti-muslim video that was made in america and posted on youtube. in yemen's capital, this mob actually managed to storm the u.s. embassy today before police could beat them back. no americans were hurt. but security is stepped up and diplomats say they are bracing for more. their boss, secretary of state hillary clinton, agrees with the protesters that the video is offensive, but she says violence in response to speech is not acceptab acceptable. >> we do not stop individual citizens from expressing their views no matter how distasteful they may be. >> meanwhile, libya now says heavily armed militants used protest as cover to attack the u.s. consulate in benghazi tuesday. libya said it has arrested four suspects and is interrogating more. ambassador chris stevens and three other americans were killed in the attack. and now we're getting a grim first look at what the mob left

behind. witnesses say the americans left bloody hand prints on the wall, a fire gutted the complex and vandals trashed everything that didn't burn. tonight, u.s. embassies all over the world lowered their flags to half-staff. the pentagon deployed two u.s. warships off the coast of libya and the president is promising to bring the killers to justice. >> i want people around the world to hear me, to all those who would do us harm, no act of terror will go unpunished. it will not dim the light of the values that we proudly present to the rest of the world. no act of violence shakes the resolve of the united states of america. coming up, turns out there is a superpower greater than the ability to fly and today fed chairman ben bernanke reminds us what it is as the federal reserve moves in a dramatic way to shore up and accelerate a slow recovery and help the unemployed. jared bernstein will join me next. and later, ron paul may be

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fits and feels just like underwear. we invite you to get a free sample and try one on too. today the unemployed received the best news they've gotten in a very long time. this guy has decided he is on their team. that bald bearded professor looking guy, that is ben bernanke and looks are not deceiving. he is, in fact, a former professor. he taught economics at princeton. he's also bald and bearded. he's now the chairman of the federal reserve. that makes him the singlemost powerful economic policymaker in america, maybe even in the world. and today he made a game changing announcement. now, i have to start here by saying a word about the federal reserve and why it's so powerful. imagine, as i often do, that you got a choice of superpowers. you could be invisible, you could fly, you could be really strong, you could -- or, you could create unlimited amounts of money whenever you wanted.

you might well choose the money one. the other ones are cool for a bit but they're not all that versatile and probably get you into a lot of trouble. the fed actually has that superpower. it can create as much money as it wants, real american dollars and don't need anybody's permission to do it. they don't need 60 votes in the senate. they just create the money. that makes them incredibly powerful. it's not like when the president says he wants to do something like the american jobs act that you have to ask, well, what does congress think? or when john boehner wants to pass something and you have to ask, what does harry reid think? the fed can just do the thing. but as spiderman would say, with great power comes great responsibility. and so the fed is very cautious in the use of its powers. by law, they need to try to keep unemployment and inflation low, but over the last two years or so inflation has been very low and unemployment has been very, very high. and they've not been doing all that much about it. earlier today, however, bernanke said, finally, that the fed has

decided to do something big about unemployment. something big enough that it might actually help. he said they were going to buy hundreds of billions of dollars of government and housing bonds and keep buying them for as long as it takes to get the recovery back on solid footing and then keep buying them as long as it takes after that to be sure the recovery is on solid footing. the way their plan works if it works is that by buying all of these bonds, they're going to drive down long-term interest rates which will give businesses and investors more reason to spend the money now as opposed to sitting on their money waiting for later. and by buying the housing bonds they're going to make mortgages cheaper which should accelerate the housing market's recovery which is already happening. but the other part of their plan, and this part is really important, they just sent a signal to businesses and investors and the market and frankly everyone else in the economy and they said, we're going to use our powers in a big, unusual way to get this

economy moving. imagine a business trying to decide whether it should hire new workers. the basic question it needs to ask is, will people be buying a lot more stuff next year than they're buying this year? if they don't see any good reason to think the economy will improve, the answer is probably no, people aren't going to be buying more stuff next year so there's no need to hire more worke erers you don't need. if businesses think people will be buying more stuff, then they need the workers. they don't want to be caught without enough product then their competitors are going to get all the sales. and so what the fed is trying to do here is influence that decision. they're saying we're going to use all our power to make sure there are people out there buying your stuff, so go hire, go do it now, we are behind you all the way. think of it like this. the federal reserve is kind of like the economy's tough older brother. if the economy is having problems with kids at school and the tough older brother is kind of distant or uninterested and just says this is your deal, the economy's kind of into some trouble. if the tough older brother makes

it clear he'll be there to back up economy up come what may and even say he's going to have a talk with some of these kids at school tomorrow, then the economy is going to be a lot more confident walking to school from now on. right now what the economy needs more than anything is confidence. you know, you wouldn't look at this guy and think he's tough. but then that's before you knew he had a superpower. joining me now is jared bernstein, former chief economist and economics adviser to vice president joe biden. now a senor fen msnbc contribut. jared, good to see you. >> good to see you, ezra. >> let me start with the big question. will it work? >> first i have to work out this thing of tough ben bernanke protecting his younger brother on the way to school. i think it will help. i think it will work in the sense of boosting economic growth a bit and probably shaving a bit off the unemployment rate. but i'm afraid that it's more, a little bit than a lot. so if there's enough bullies picks on that little brother, ben might have more trouble than

you might expect. >> right. >> and here's the thing. what these actions do, as you just described, is they lower interest rates, they create more liquidity in mortgage markets, things like that. and that's helpful. but in an economy that where demand is still weak, it's kind of like you've set the table but you don't really have the customers in there. >> yeah. >> interest rates can be very low. frankly, they're already quite low. there can be -- there's lots of cash sitting on the sidelines that aren't really taking advantage of the low rates we have. so monetary policy gets you part of the way but you also need fiscal policy to generate demand, give the low interest rates traction. >> this is what bernanke has been saying for a long time -- >> he, himself. >> he's been begging congress to do fiscal policy but the thing is congress just isn't acting. >> right. >> i think one of the questions is whether or not we've hit sort of a point in the congress where it can work. the reason i'm personally optimistic about it, i think the housing recovery, which is where recoveries tend to come from --

>> right. >> -- as you know better than me, has begun to take hold enough that this could really be an accelerant. if this is an accelerant of it, this is the real economy, not just liquidity and interest rates somewhere off in -- >> you're more bullish on this as i am. i'm bullish. i'm not as bullish as you. first of all, you're absolutely right. bernanke has been calling for more fiscal policy because he recognizes the following thing. an sent more demand, more consumer demand, more investors feeling like there will be returns on their projects. the low interest rates simply don't have the traction they would have otherwise. so people are -- the businessperson you described earlier sitting there on the sidelines deciding whether to make an investment, the interest rate looks good but they don't have the customers coming in the door. so unless we have -- this is whier why er bernanke himself has been calling for this. unless we see action on the demand side, the estimates i've seen for what the fed did today, maybe it will raise gdp by half

a point, maybe shave .3% off the unemployment rate. it's not a difference between a slog and a great economy either. >> one of the things people have been saying, one of the reasons i'm optimistic about it, the big argument is this is the fed saying, we're going to help now and if we need to do more later, we'll do more later. why did it take them so long to say, we're going to switch gears? >> it's a good question. by the way, it's not just that they're saying we're going to help now. we're going to help and keep helping. everything has been time limited. same thing in europe. you have central banks swinging for the fences with these unlimited bond buys. they're saying, we're going to keep helping until things get better. why did it take so long? two reasons. one, you said it yourself, they're cautious. they worry about distorting the market, worry about inflationary pressures down the road. they're not going to do this unless they think it's safe. secondly, there's an election out there. the fed gets pilloried for moving in an election year. he had to get consensus on the

committee. 11 out of 12 people voted for this today. that shows he did get that consensus. >> jared bernstein, we're going to have you stick around. coming up, could the iphone 5 be the extra push we need to rescue the economy? it's possible. i'm going to make the case. i didn't think it was anything. i had pain in my abdomen... it just wouldn't go away. i was spotting, but i had already gone through menopause. these symptoms may be nothing... but they could be early warning signs of a gynecologic cancer, such as cervical, ovarian, or uterine cancer.

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apple's latest smartphone, the iphone 5 is faster, sleeker than its predecessors. you'll need a new connector which is kind of a bummer and a scam from apple but you'll have a larger screen. but did you know this? the iphone 5 could be more than just another upgrade. it could quite possibly make a big difference in the economy in the next quarter. here's the explanation. in a new analysis, jp morgan's chief u.s. economist michael feroli calculates sales of apple's latest product could boost economic growth in the fourth quarter by up to .5 percentage points, half of 1%. what does that mean in english? could be a difference between another quarter of bad results and a quarter of a little bit better results. froli's math is simple. the iphone will sell for about $600 a unit. subtract $200 for imported parts. that leaves $400 to be added to the gdp. if apple sells 8 million iphones, that's a $3.2 billion boost to the economy in that quarter. that increases annual fourth quarter growth by .33 percentage points. factor in the notion these iphones are cool in improvement

and will be a lot of accessories sold and numbers get better, around a half percentage paint. froli himself warns to be skeptical of these figures but points to sales of the iphone 4s, the last iphone, as proof his projection is a real possibility. that iphone way outperformed expectations and there was a lot less buzz around that product and it wasn't even the 5. so the iphone 5 could give the economy a much needed shot in t the arm. so thank you, apple. we are continuing to monitor the situation in cairo, where protesters are gathering in the streets. we'll be sure to report the latest developments as and when they happen. up next, jared bernstein and dave weigel will join me to discuss how ron paul's fight against the fed has been catching on within the republican party. gomery and abigail higgins had...

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in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪ today, something kind of amazing happened. something that really tells you about what the republican party is becoming. senate minority leader mitch mcconnell hired jesse benton to be his press secretary. now, you might ask, who is jesse benton? jesse benton was ron paul's press secretary in the 2008 presidential election. he was rand paul's campaign manager during his 2010 senate run and then he was ron paul's campaign manager during his 2012 presidential run. so this is a guy who has been as anti-establishment, and as pro-paul as any republican in the country. in fact, for rand paul, the son, to get to the senate, he first

had to win a primary against mitch mcconnell's hand-picked candidate in kentucky. it was the true believer conservative outsiders against that entrenched washington establishment. now one of the truest of the true believers is moving into a key position on mcconnell's campaign. but in some ways the move shouldn't be too much of a surprise. to a degree people i think really don't appreciate, ron paul's dramatically changed the face of the republican party. not on everything, of course. his attitudes on foreign policy and on the drug war haven't gotten him very far. but his positions on the size of government and in particular on monetary policy on the fed have basically won. i mean, the last book ron paul wrote, the thing he really wanted people to know about him before he ran for president in 2012 was called "end the fed." that is one of his core policy beliefs right there. and on that issue at least, this is now ron paul's republican party. you heard it from rick perry last year. >> paul got me really intrigued

with the whole, the federal reserve, and i've spent a substantial amount of time reading about and "currency wars," the book. congressman paul is the individual on stage that got me most interested in a subject that i found to be quite interesting and at the root of a lot of the problems we have. and i thank you for that. >> you see it in romney's vice presidential pick, paul ryan. "reuters" wrote a great article on this subject. the headline of which was, "ryan's fed policy views well outside mainstream. ." the article said, quote, paul ryan doesn't want to quite end the fed, that's an endorsement, but if mitt romney's pick for vice president had his way, he might curb the central bank's powers enough to make it harder for the policymakers to respond aggressively to the economic downturns. then today, quote, the federal

reserve's announcement of a third round of quantitative easing is further confirmation that president obama's policies have not worked. here it is, the american economy does not need more artificial and ineffective measures. that's what they think of bernanke, of his monetary policy. it's convenient for republicans to oppose further fed action now, because if president obama can't act through congress and the fed doesn't act either, obama and the economy are stuck until the election. even arguments assumed for convenience can become genuinely believed with time. i'm joined by jared bernstein. also joining us is my friend dave weigel, msnbc contributor and political reporter for slate.com. so, dave, tell me, a few years ago -- you've been covering paul for a long time. when he really began coming up in the republican party in 2006,

2007, where did his monetary policy views fit in the mainstream of the party? >> nowhere in the mainstream. actually when he left the race and bob barr started running as libertarian candidate trying to capture the old paul movement, remember him telling me he just wasn't that interested in the issue. he didn't think it was a majoritarian issue. it's not just superstition that got them paranoid about the fed. the fed became more active in response to the financial crisis. in the dodd/frank bill, we saw elizabeth warren cfpb created inside the fed. there are a number of actions the fed has taken that have, you know, had them looking at paul less like the crazy guy waving a stick and more like moses, frankly. i mean, like, somebody who was out there right about it the whole time. >> so, but jared, so let's say he took the paul -- before the crisis you had ended the fed. what would have happened? >> the crisis would be far deeper and longer lasting than it was. and remain so. i mean, if you look back -- we

actually have history, so if you look back before the federal reserve was in place, and you look at indicators like output growth or inflation they kind of look like the ekg of someone who's having a heart attack. if you look at inflation over the last few decades when the fed has been targeting it, much, much smoother. if you look at -- the conversation we were having a second ago. the economy is stuck. you mentioned fiscal policy is in gridlock. the federal reserve can come in and do things to boost the economy. look at europe. central banks are critical to growth these days. >> and so one of the things i all the wonder when we see an argument like this migrate to the mainstream, the republican party is in opposition now. they don't like anything that's happened over the past four years, even things they used to like. if mitt romney wins the election, republicans return to power and now they control or they're at least named the next chairman of the federal reserve. they did initially appoint bernanke. will this dissipate or remain a force in the party? >> this wasn't the way they talked in the bush years. there's a very cynical

pro-romney argument if you want the fed to be more stimulative this will dissipate as they take power. paul ryan was back in capitol hill today and voted for cr to continue funding the government because it's politically not convenient for him. it was politically convenient to take him off the works he voted against it, demanded more cuts. the degree to which they're opposing this is really striking. you were talking about the beginning, paul has captured the republican party on this issue. a year ago, mitch mcconnell and the rest of the leadership of the republican party sent a letter to bernanke asking him not to do differently the second round of quantitative easing and using the arguments that paul -- not just that paul's been making but romney is making today. that look, it's a bit of a paradox. it's artificial. it's not going to help the economy but we're also worried it's going to artificially stimulate the economy and help democrats get elected. the whole democrats get elected thing fades away with democrats don't get elected. >> if mitt romney comes in, i'm curious on your take on this, do

you think he'll pick cha-- >> i think if that were to pass, i think he'd be looking at a much more dovish attitude toward the fed, i'm thinking a glenn hubbard type economist who absolutely believes there's a place for a central bank in an economy like ours. i view this as a kind of strain that's gotten its way into the far right of the campaign. >> and that's one of the interesting things about romney right now, real wiquick. a key adviser like hubbard, his economic advisers are very traditional sort of pro-federal reserve types, right? they're still there. he's not abandoned them. >> he hasn't. no. the chen statement -- i think romney when he's talking about this -- talking more about this in interviews. it's just the argument this isn't working. not that politically no one should ever do it. and the argument, again, i repeat it, it's a paradox. they say that it's not working, it didn't lower unemployment enough. then they imply it's lowering unemployment. so they're talking to the republican base but they'llto